Blue Christmas By James Howard Kunstler

[Crewleader]

Blue Christmas
By James Howard Kunstler
On December 21, 2009 7:05 AM

As the end-credits rolled for James Cameron's new movie, Avatar, the audience burst into rowdy applause. It seemed to me that they were applauding the sheer computerized dazzlement of the show -- but in the story itself they had just watched the US suffer a humiliating defeat on a distant planet. In the final frames, American soldiers and the corporate executives they had failed to protect were shown lined up as prisoners-of-war about to embark on a death march.

More to the point, the depiction of our national character through the whole course of the film was of a thuggish, cruel, cynical, stupid, detestable, and totally corrupt people bent on the complete destruction of nature. Nice. And the final irony was that Cameron had used theatrical technology of the latest and greatest kind to depict America's broader techno-grandiosity -- as the army's brute robotic warriors fell to the spears and arrows of the simple blue space aliens. Altogether, it was a weird moment in entertainment history, and perhaps in the American experience per se. No doubt audiences overseas will go wild with delight, too, but perhaps with a clearer notion of what they are clapping for than the enthralled masses of zombie Americans.

The infatuation with technology, and the disgusting cockiness that goes with it (so well-captured in Avatar), is but one facet of the psychosis gripping the nation -- and by that I mean the profound detachment from reality. We have no idea what is happening to us and, naturally, no idea of what we are going to do. I sat in a bar Friday evening with a financial reporter from a national newspaper, trying to explain the peak oil situation and what it implied for our economy. He had never heard it before. The relationship between energy resources and massive debt was new to him. (It also came up in conversation that he could not tell me what the Monroe Doctrine was about, despite a history degree from Yale.) There you have a nice snapshot of the mainstream media in this land.

This year, America can look for a nice lump of coal in its Christmas stocking. That lump will be called "the recovery." This recovery consists of a massive self-deception, made up of accounting tricks and falsified statistics, with a sugar-coating on top of sheer disbelief that the outcome could be anything but a particular happy ending -- namely, the continued levitation of the unsustainable. What is most amazing about Mr. Cameron's holiday blockbuster is the explicit message that America is a society that deserves to be punished (and humiliated!) by others who manage their own relations with reality better than we do. I wonder how much that will secretly account for its popularity. I wonder what the leaders of China will make of it.

http://kunstler.com/blog/2009/12/blue-christmas.html#more

[ixion]

1. "thuggish, cruel, cynical, stupid, detestable, and totally corrupt"

That describes the state of the US government and many of it's citizens.

[NoNothing]

5. Yeah

Merry Christmas to you too, pal.

[girl gone mad]

2. to the greatest..

always look forward to reading JHK.

[defendandprotect]

3. kick to read later ---

Is this Bill Kunsler's son???

[wuvuj]

4. China vs the US...what our leaders have wrought?

http://www.uncommonwisdomdaily.com/did-you-grab-your-profits-4-7923

...

It’s one thing when you pull the wool over a few people’s eyes, like Bernie Madoff did. But it’s another when the entire world wakes up and realizes the Emperor has no clothes.

The comparison may sound harsh, but nevertheless, it’s accurate. While Madoff fleeced some of the richest of the rich in a giant Ponzi scheme, Washington is attempting to fleece almost the entire world.

It won’t work. Many of our creditors are too savvy to fall for Washington and our central bank’s shenanigans.

That’s why the Fed will be forced to continue printing money in 2010, and why it will not be able to exit its policies of supporting the U.S. economy and financial markets.

On the one hand, our foreign creditors know what’s going on. But they cannot stop lending us the money we need for fear of a global meltdown.

Instead, countries such as Japan and China will continue to help buy our debt.

On the other hand, they will actively seek refuge in assets that outperform anything denominated in dollars.

Suffice it to say that the above is why, in just the past 12 months, the U.S. dollar’s status as the world’s reserve currency has not only come into question, our largest creditors are actively seeking to replace it.

Which leads me to one other big force I think you should keep in mind for 2010 …


B. The Fed’s money-printing will benefit China more than it will benefit the U.S.

So China will defy the pundits yet again in 2010. First of all, and like it or not, China is still the manufacturer to the world. And that’s not going to change anytime soon.

Not when you have a billion people who are willing to work for 25 cents a day.

Secondly, China is soaking up most of the Fed’s money-printing, via purchasing large amounts of it through our bond markets.

Yes, that does mean that they do still recycle a good portion of it back into the U.S.

But it also means that China’s influence over us is growing almost daily …

That China is now receiving hundreds of billions in interest payments from us …

And that whatever liquidity China provides the U.S. actually ends up benefitting China and other countries more than it does us because of the "dollar-carry" trade. In other words, savvy investors of many sizes and shapes simply borrow cheap money here and invest it in China.

And there is no denying the financial strength now inherent in China’s economy …

Beijing now has $2.37 TRILLION in cash in its kitty

At least $585 billion being spent on infrastructure, with a good portion of the stimulus due to hit the economy in 2010

Retail sales still robust, growing at an annual rate of 15.3%

Disposable income still rising, up 9.8% in 2009

Fixed-asset investment growth up 32.1%

Property sales up 53%

Investment in real-estate development, up 17.8% through November

Auto sales up an incredible 76%, to more than 13 million vehicles produced AND sold in 2009

Beijing is committed to not letting anything derail the economy’s growth. And to the pundits out there who claim China will end up like the former Soviet Union and collapse in 2010, I say you’re going to be dead wrong, yet again!

China is nothing like the former Soviet Union. Unlike the Soviet Union, Beijing’s leaders are well aware that change is coming to their country, and they are well aware of the influence of long-term cycles.

So, unlike the Soviet Union, China’s leaders are "going with the flow" of the changes to their economy and civilization rather than fighting it.

It’s evident in all their policy decisions from privatizing property rights, to easing up on censorship, to cutting deals with Western companies to secure not only natural resources, but also intellectual resources and more.

But perhaps the biggest factor of all in China’s continued growth and outperformance in 2010 will be our own Federal Reserve: For all the money it will print, for all the debt it will issue, China will be the main beneficiary. Why and how?

Because what the Fed doesn’t realize is that its efforts are indirectly subsidizing not just the U.S. economy, but also that of our biggest creditor — China.

It means China will eventually soak up most of the newly minted dollars, recycling them into its own economy. No, that doesn’t mean China will stop purchasing our debt.

It doesn’t have to. The Chinese economy is generating enough GDP to buy our debt to stash it into its reserves and hedge those reserves by securing natural resources, thus overall liquefying its entire economy.

China is in a "heads I win, tails you lose" position. And not just with the U.S. but with virtually the entire world. So I expect China’s stock market to vastly outperform the U.S. markets yet again in 2010.

...

But we have a real big military?